What You Should Know First
Personal loans can be very helpful when you need money for a big expense, an emergency, or even to consolidate debt. However, they can also become costly if interest rates are too high.
One way to make borrowing cheaper is by choosing a secured personal loan, where you provide something valuable, such as a car, savings account, or home fixture, as collateral. In return, lenders usually give you a lower interest rate compared to unsecured loans.
Investopedia reviewed 59 different lenders and ranked them based on several important factors, including feedback from hundreds of borrowers.
After careful research, Patelco Credit Union was ranked as the best overall secured personal loan provider, mainly because of its very low interest rates, wide borrowing range, and flexible terms.
Below is a detailed look at the top secured personal loan options for August 2025, their features, and what makes them stand out.
Best Secured Personal Loan Providers – August 2025
1. Patelco Credit Union – Best Overall & Best Credit Union
- APR Range: 9.30% – 17.90%
- Loan Amounts: $300 – $100,000
- Loan Terms: 6 – 84 months
- Credit Score Requirement: Not disclosed
Why We Chose It:
Patelco offers one of the lowest starting APRs in the industry, giving borrowers a chance to save significantly on interest. The loans are flexible, with amounts ranging from just a few hundred dollars to $100,000, making it suitable for both small emergencies and large projects. Patelco also charges no origination fees, which helps reduce upfront borrowing costs.
Pros:
- Very low minimum APR (as low as 2.50%)
- Option to borrow up to 100% of your Patelco savings account balance
- No origination fees
Cons:
- Requires a Patelco savings account
- Membership in the credit union is necessary
2. Upgrade – Best for Fair or Bad Credit
- APR Range: 7.99% – 35.99%
- Loan Amounts: $1,000 – $50,000
- Loan Terms: 24 – 84 months
- Credit Score Requirement: Minimum 580
Why We Chose It:
Secured loans usually make it easier for borrowers with limited or poor credit histories to qualify since collateral reduces risk for the lender.
Upgrade stands out because it accepts applicants with credit scores starting at 580, making it one of the most accessible secured loan options. It also offers several rate discounts, which can help reduce costs for borrowers with less-than-perfect credit.
Pros:
- Accessible to borrowers with fair or poor credit
- Rate discounts available for autopay or direct deposit
Cons:
- Only auto-secured loans are offered
- APR can be as high as 35.99%
- Origination fees up to 9.99%
- No short-term options (minimum 24 months)
3. OneMain Financial – Best for Range of Vehicles
- APR Range: 18.00% – 35.99%
- Loan Amounts: $1,500 – $20,000
- Loan Terms: 24 – 60 months
- Credit Score Requirement: Not disclosed
Why We Chose It:
Many secured lenders limit the type of collateral they accept, but OneMain Financial offers more flexibility. Borrowers can use different kinds of vehicles as security, making it easier for those without strong credit or savings to qualify. It’s also one of the few lenders willing to work with non-prime borrowers.
Pros:
- Wide range of collateral accepted (multiple vehicle types)
- Works with borrowers who don’t have excellent credit
Cons:
- High minimum APR (18%)
- Origination fees can be as high as 10%
- Limited loan amounts ($1,500 – $20,000)
4. Best Egg – Best for Homeowners
- APR Range: 6.99% – 35.99%
- Loan Amounts: $2,000 – $50,000
- Loan Terms: 36 – 60 months
- Credit Score Requirement: 640
Why We Chose It:
Best Egg offers a safer alternative for homeowners who want to borrow without risking foreclosure. Unlike traditional home equity loans that use your house as collateral, Best Egg allows you to secure your loan with fixtures in your home instead. This reduces the risk of losing your property while still qualifying for lower rates.
Pros:
- No foreclosure risk
- Homeowners can receive significant APR discounts (around 20%)
Cons:
- High maximum APR of 35.99%
- Origination fees up to 9.99%
- Loan must be paid off if the home is sold
5. First Tech Federal Credit Union – Best for Large Loan Amounts
- APR Range: 7.89% – 18.00%
- Loan Amounts: $500 – $50,000 (with some loans up to $1 million)
- Loan Terms: 6 – 84 months
- Credit Score Requirement: Not disclosed
Why We Chose It:
First Tech is ideal for borrowers who need large funding amounts. It offers multiple secured loan types backed by different assets, and in some cases, you can borrow up to $1 million. For those who don’t need such a large amount, there are smaller loan options starting at just $500.
Pros:
- Extremely wide borrowing range ($500 – $1 million)
- Very competitive minimum APR (3%)
- No origination fees
Cons:
- Stock-secured loans require at least $25,000
- Membership in the credit union is required
How a Secured Personal Loan Works
A secured personal loan functions similarly to an unsecured one, but with one major difference: you must pledge an asset as collateral. This could be a car, savings account, stock portfolio, or home fixture. If you fail to repay the loan, the lender has the right to seize the collateral to recover their money.
When applying, lenders usually ask for:
- Proof of income (like pay stubs)
- Government-issued ID
- Social Security number for a credit check
- Bank account details for deposit of loan funds
Interest rates and fees may be negotiable, especially for borrowers with strong credit. In addition, many lenders provide rate discounts for autopay, helping borrowers avoid late payments and reduce costs.
Who Should Consider a Secured Personal Loan?
This type of loan is particularly useful for:
- Borrowers with poor or limited credit history
- Those who need quick access to funds but cannot qualify for an unsecured loan
- People who can responsibly pledge collateral and repay on time
However, it carries risks. If you miss payments, you don’t just hurt your credit—you could also lose your collateral. That’s why it’s most suitable for borrowers who are confident in their ability to make regular payments.
Common reasons for taking secured loans include:
- Medical bills
- Urgent moving costs
- Tax payments
- Home repairs
Important Terms to Understand
- Collateral: The asset you pledge (vehicle, savings, stock, or home fixture) to secure the loan.
- Secured Loan: A loan tied to collateral; includes mortgages, car loans, and secured personal loans.
- Credit Score: A number (300–850) based on your credit history that shows how risky you are as a borrower.
- Credit History: Your full borrowing record, including past loans, repayment habits, and accounts.
- APR (Annual Percentage Rate): The yearly cost of borrowing, including interest and some fees.
- Predatory Lending: Unethical lending practices that often target borrowers with poor credit by offering high-interest loans with hidden terms.
Pros and Cons of Secured Personal Loans
Pros:
- Access to funds even with poor credit
- Possibility of lower APRs compared to unsecured loans
- Useful for emergency or large expenses
Cons:
- Requires valuable collateral
- Credit union loans may require membership
- Risk of losing pledged asset if you default
Methodology – How This List Was Created
Investopedia analyzed 59 banks, credit unions, and lenders between July and October 2024. Researchers looked at 45 different factors, grouped into four weighted categories:
- Loan Costs (30%) – APRs, origination fees, late fees, and autopay discounts
- Borrowing Requirements (24%) – Collateral rules, membership, credit score needs, and more
- Lender Features (24%) – Online experience, educational tools, prequalification options
- Loan Terms (22%) – Funding speed, repayment flexibility, approval process
This extensive research, combined with borrower surveys, was used to determine ratings and highlight the best secured personal loan providers for August 2025.
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